Shares slipped on Monday as investors brace for a possible acceleration in inflation that could tip the Reserve Bank closer to raising Australia’s cash rate at a time when other central banks are easing monetary policy.
The benchmark S&P/ASX 200 Index fell 0.2 per cent, or by 15.1 points to 7783.3 at the opening bell, weighed down by sharp losses in the healthcare and energy sectors.
Healthcare stocks were the worst performing, down 1.8 per cent. A 11 per cent tumble in sleep apnoea manufacturer ResMed dragged the entire sector lower. Cochlear dropped 1.2 per cent and CSL slipped 0.5 per cent.
In Australia, forecasts for the monthly consumer price index indicator to be released on Wednesday suggest an acceleration in the pace of annual inflation to 3.8 per cent in May, up from 3.6 per cent in April.
“Any slight pick-up will be a concern for the RBA, and therefore markets,” said George Boubouras, head of research at K2 Asset Management.
“The governor has made it clear that they need to see clear signs of falling prices pressures over a number of months, which is proving to be a policy challenge.”
He said strong fiscal stimulus by the federal and state governments, a tight labour market, and resilient consumption amid solid global activity made the RBA’s job difficult.
Stocks in focus
Cettire shares slumped over 40 per cent after the retailer said its fourth quarter trading had been hit by a downturn in the online luxury industry.
Myer rallied over 9 per cent following an announcement that it was exploring a merger with Premier’s apparel business, which includes Just Jeans and Jay Jays.
IGA parent Metcash droped 1.9 per cent after its underlying profit after tax slumped 8.2 per cent to $282.3 million, according to the company’s 2024 financial year results. The retailer’s group revenue increased 0.7 per cent to $15.9 billion.
Ousted Star chairman David Foster has officially left the board of the casino group and his position as interim chief executive. Star told shareholders on Monday that its chief financial officer, Neale O’Connell, would take on chief executive responsibilities until a replacement starts with the group. The casino operator also issued a profit warning. Shares dropped 4.1 per cent.